A team of developers behind Bitcoin’s second-layer Lightning Network platform has published a proposal for a simplified off-chain transaction mechanism – named Eltoo.
The solution would solve a number of problems which exist in the current implementation of the Lightning Network, such as the amount of data required to run a node and the removal of “toxic information”.
Currently, users who accidentally broadcast older data on the Lightning Network could lose their money to other participants in the network.
Eltoo solves this by only storing the most recent set of off-chain transaction data.
“Eltoo doesn’t aim to replace the entirety of the Lightning stack,” wrote Blockstream’s Christian Decker.
“Rather it is a drop-in replacement for the original update mechanism that maintains backward compatibility with the other parts of the stack.”
Decker said that before Eltoo can be implemented, a minor change must be made to Bitcoin’s architecture: the introduction of the “SIGHASH_NOINPUT” flag for signatures.